Argentine pensioners decry mistreatment by their government

Their trip to Washington, organized with the help of ATFA, serves as a powerful reminder of how important it is that Argentina once again respect its obligation and help craft a solution to repay billions of dollars owed to its creditors.

These Argentine citizens represent thousands of individual bondholders whose personal savings and quality of life depend on the outcome of a recent U.S. Second Circuit decision directing the Buenos Aries government to repay the bonds that remain outstanding 12 long years after its historic $81.8 billion sovereign debt default in 2001.

These individuals are mostly middle-class, older Argentines who invested their hard-earned money in Argentine bonds, to help support their country while securing their own retirements. In return, their government has offered years of silence, neglect, denial and, finally, retaliation for declining that government’s offers in 2005 and 2010 to “swap” their defaulted bonds for new paper worth about one-quarter of their legitimate claims.

Maria Corral and Pierino Garrafa are among those visiting with members of Congress, who entrusted their hard-earned savings to their government and now find themselves with nothing but broken promises and personal attacks on their reputations. Maria Corral, 76 years old, worked for 42 years as a bilingual secretary for a Swiss company that closed its Buenos Aries in 1998, leaving her jobless. She invested her severance pay, her savings, and her mother’s savings in Argentine government bonds. At the time, it seemed to her to be a low-risk investment that would help the country she loved. Within a few years, her mother’s health deteriorated, and then her government defaulted on her sole investments. Soon, just getting by became a struggle. She could not accept the government’s offers in 2005 and 2010 to write off three-quarters of her family’s small lifetime savings. How could she and her ailing mother live with – or on – that?

Pierino Garrafia is the son and grandson of immigrants to Argentina. He studied and became a public accountant, and worked all of his life to support a simple lifestyle. He, too, invested his savings in his own government’s bonds to ensure a secure future for himself. Now, he feels that his country has robbed him instead of protecting his savings, as it had promised. Mr. Garrafia has also travelled to the United States, putting his trust now in the American justice system in hopes that we can persuade his government to act in good faith and repay its debt to him.

When the Argentine Government solicited investors for its bond offerings, it pledged to Maria Corral, Pierino Garrafia, and all of its other lenders that they would enjoy the protection afforded by securities issued under N.Y. law. Yet, those pledges have become empty promises as the governments of Nestor Kirchner and his widow and successor Christina Kirchner Fernandez have refused to honor more than 100 U.S. federal court judgments directing them to repay more than $7 billion.

The Second Circuit Court will once again hear oral arguments from both sides on February 27. They will consider the implications of Judge Griesa's ruling on October 26, that Argentina, like any other debtor before U.S. courts, must treat all of its bondholders equally. Corral and Garrafia, like thousands of other private citizens, corporations and partnerships that loaned their money to the Argentine government, want that government to act in good faith and repay them on an equal footing, as it promised it would.

In recent months, Argentina has found itself increasingly isolated for refusing to honor these and other obligations to the World Bank, the World Trade Organization, other national governments, as well as countless private investors around the world. That isolation has become even more stark as Buenos Aries has responded by cracking down on press freedoms and other civil liberties.

Growing international criticism of the government's bad acts has damaged not only that country’s international stature, but the lives of its citizens. The United States and our justice system should support these private bondholders as well as American investors, in declaring finally that “enough is enough.” Argentina must honor its promises and pledges and negotiate with all of its outstanding creditors to reach a just solution -- and head off yet another Argentine debt default.

Shapiro is co-chairman of American Task Force Argentina, chairman of the economic advisory form Sonecon, LLC, and former under secretary of Commerce for Economic Affairs in the Clinton Administration.